FWF Wage Ladder

Wage Ladder FAQ:

What is the Wage Ladder?
The FWF Wage Ladder is an easy-to-use online tool that allows the wages paid at any factory to be compared against a range of wage benchmarks. The Wage Ladder generates a clear, easily understandable graphic that shows where a factory’s wages fall short in comparison to these benchmarks.

What is the benefit of FWF’s wage ladder?
Brands, suppliers and workers’ representatives can see how current wages compare to living wage estimates – and can begin negotiations on how to make improvements, moving wages ‘up the ladder’ in regular steps. By combining information from FWF’s international stakeholder network with data visualization techniques, the Wage Ladder replaces stacks of spreadsheets and reports with easy-to-understand graphics, making negotiations much more productive.

What’s different about the version 2.0?
FWF and its members can now compare wages between male and female employees and between different departments, both on a country and region level. A unique new function in the tool enables FWF to analyse trends and better measure progress in garment factories – to see, for example, whether wages have increased between factory audits.

Who determines the benchmarks?
Local trade unions, NGOs, labour groups, business associations, and government agencies have been asked to estimate a living wage for their country or region. International and national benchmarks, such as the Asia Floor Wage, the UN poverty line and wage statistics, have also been included.

What is the reasoning behind FWF’s wage ladder?
Payment of a living wage is one of FWF’s eight labour standards. A living wage means that workers’ basic needs, including food, clothing, housing, healthcare and education, are met. The idea is simple: people who work a normal working week should be able to make a living.

The export-oriented garment industry has great potential to lift millions of workers worldwide out of poverty. In most low-cost production countries, however, wages are too low for workers to meet basic needs, like food, shelter, and health care. The obvious answer to relieving the poverty of workers participating in garment supply chains is to find mechanisms that increase the wages of those at the bottom of the supply chain.

While global garment supply chains generate enormous wealth, improving wages, has proven a challenge. Progress has stalled in discussions about what, exactly, constitutes a living wage. Sidestepping these discussions, FWF has developed a web-based tool that will help garment brands and factories to gradually improve workers’ wages.

What is the difference between a living wage and a legal minimum wage?
Payment of a living wage is one of FWF’s eight labour standards. A living wage means that workers’ basic needs, including food, clothing, housing, healthcare and education, are met. The idea is simple: people who work a normal working week should be able to make a living. In most low-cost production countries, however, legal minimum wages are still too low for workers to meet basic needs.

Is the wage ladder tool only applicable in the garment industry?
The FWF Wage Ladder was originally designed for use in the garment industry, however most wage benchmarks apply to any industry. Brands, factories, NGOs, labour groups and government agencies active in industries as diverse as electronics, toys and agriculture will find the tool helpful.

The FWF Wage Ladder was made possible by the generous support of Dutch trade union CNV Internationaal and the Dutch ministry of foreign affairs.